Yahoo's boss is not up to the challenge

Superstar executives usually lose momentum sooner or later. The same holds true for fast growing organizations. In this blog, John McKee asks if Yahoo and its CEO Carol Bartz have moved from "hot" to "not".

In an article in the Los Angeles Times, Jessica Guynn questioned if Yahoo boss Carol Bartz has run out of time in her role. Guynn says Bartz hasn't delivered as hoped and posits that she may soon be pressured out of the organization. I agree.

Brought in to fix a broken company, Bartz immediately made some good executive and structural changes. With two core objectives as the new CEO, she said that she'd fix the company and get it back onto its former greatness. Industry watchers were split — she had no history in the Search business, but a few decision makers clearly had fallen in love with her tough, can-do attitude at other organizations within the tech sector. (Even those outside the tech industry were fascinated: an article in Esquire magazine led with this headline,"Hi, I'm Carol Bartz. Are you an as*h*le?")

When she arrived, she said that her first objective would be to deal with the formerly great company's lack of strategic focus. Her stated intention was to force Yahoo's various arms, and key executives, into moving in the same direction. She noted that this, by itself, would drive up the stock prices / company value. Then, she'd focus on getting the organization acting more cohesively, in a smarter direction.

At the time, I was inclined to think she had the right stuff. She was not as well known to the outside world as many male tech sector CEOs, but her entire history was one of overcoming the odds. In "Can Yahoo Succeed under Carol Bartz?" which I wrote back in January 2009, I cited her successes in other jobs where people said she'd fail. I thought we'd see some solid growth, reduced expenses, and increasing stock prices within 12 months. And she did do some of that.

But her biggest move was a deal with Microsoft boss Steven Ballmer in July 2009. It was expected to raise revenues by up to $500 million a year. Although the deal helped initially, since then its overall impact seems to have been too little too late for the company's investors.

Although Yahoo is trading higher now than it was, about $16.10, it never broke $20 in the past year. Yesterday's (October 19, 2010) quarterly report made shareholders even more interested in a new direction. She's lost the faith of lenders. Despite doing some things well, many decision makers involved with stock issues are now pushing for a deal with AOL.

If Yahoo is to continue as an important factor in the industry, it's time for a new leader with a different approach.

Here's to your future.

John

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About John McKee

John M. McKee is the founder and CEO of BusinessSuccessCoach.net, an international consulting and coaching practice with subscribers in 43 countries. One of the founding senior executives of DIRECTV, his hands-on experience includes leading billion d...

Full Bio

John M. McKee is the founder and CEO of BusinessSuccessCoach.net, an international consulting and coaching practice with subscribers in 43 countries. One of the founding senior executives of DIRECTV, his hands-on experience includes leading billion dollar organizations and launching start-ups in both the U.S. and Canada. The author of two published books, he is frequently seen providing advice on TV, in magazines, and newspapers.